WASHINGTON - The
Office of the United States Trade Representative today released its 2003 annual
report documenting foreign trade barriers to U.S. exports. The National Trade
Estimate (NTE) Report on Foreign Trade Barriers also highlights instances when
U.S. trading partners reduced or eliminated trade barriers.

"Bringing down
barriers to trade promotes growth and prosperity, for the United States and for
the world," said U.S. Trade Representative Robert B. Zoellick. "American
workers, businesses, and farmers expect a level playing field abroad. The Bush
Administration is committed to identifying unfair barriers to U.S. exports and
to working aggressively with our trading partners to eliminate those barriers.
"

The expansion of
free trade over the past 50 years has helped to create sustained global economic
growth. Trade expansion has contributed to this increase in prosperity by
helping nations take advantage of comparative economic strengths; supporting
productive, higher paying jobs in export sectors; offering more value and choice
to consumers and business; and encouraging foreign investment in the U.S. and
other economies. In the developing world, countries that opened their borders to
trade have grown far faster than those that remained closed.

The NTE includes
a list of unfair trade practices and barriers to American exports of goods,
services, and farm products. In addition to limiting commercial opportunities
for U.S. businesses, these barriers undermine the substantial potential gains
from trade among developing countries. The NTE covers 56 major trading partners
in each region of the world and profiles policies restricting market access.
This year's report highlights the continuing use of non-tariff barriers
(NTBs)-unscientific sanitary and phytosanitary standards (SPS), burdensome
customs procedures, government monopolies, and opaque regulations-for
protectionist purposes. The report also focuses on deficiencies in intellectual
property (IP) rights protection and barriers to U.S. agricultural exports. The
NTE notes many examples where countries have reduced or eliminated trade
barriers described in earlier reports.

The persistence
of trade barriers affirms the need for the United States to remain actively
engaged in promoting and enforcing trade liberalization at all levels: Globally,
in the ongoing World Trade Organization (WTO) negotiations; regionally, through
the Free Trade Area of the Americas negotiations; and bilaterally, through free
trade agreements (FTAs) with trading partners such as Chile, Singapore, Morocco,
Australia, the five members of the Central American Common Market, and the five
members of the Southern African Customs Union. This report helps build domestic
support for these negotiations by highlighting the potential commercial
opportunities that liberalization would create.

As required by
the Omnibus Trade and Competitiveness Act of 1988, USTR prepares the NTE Report
in close consultation with other U.S. Government agencies, based on the
Administration's monitoring program and information provided from the public and
private sector trade advisory committees. This year, as in the past, the USTR
solicited public comments and, in response, received 64 submissions. U.S.
Embassies also participated actively in the preparation of the report and
provided critical input based on the experience of U.S. exporters abroad. In
addition, these barriers are the subject of consultation with the Congress
throughout the year.

The full text of
the trade barriers report will be available in the press releases section of the
USTR Web site, www.ustr.gov, at 10:30am est. Bound copies of the report will be
available from USTR's Office of Public Affairs beginning April 8,
2003.

Highlights of
the 2003 report:

The Effect of
Non-Tariff Barriers on U.S. Agricultural Trade

U.S. farmers and
agricultural firms rely heavily on export markets to sustain prices and
revenues. These markets have accounted for up to 30 percent of U.S. farm income
over the past 30 years and are projected to remain at this level in the near
future. Agricultural exports also have significant linkages to the non-farm
economy, particularly through their effects on employment and off-farm business
activity.

U.S. agricultural
producers are among the most competitive in the world, and the United States has
been a net exporter of agricultural products since the late 1950s. Yet U.S.
agricultural exports would be even greater without the NTBs that are used
against them. Since the EU imposed a moratorium on imports of agricultural
biotech products in 1998, for example, U.S corn exports to the EU have declined
by 55 percent. U.S. poultry exports to Russia have decreased by almost 45
percent since import restrictions on U.S. poultry have gone into effect. Russia
is the top U.S. export market for poultry and the import restrictions helped
contribute to a $500 million decline in U.S. poultry exports to the world last
year.

Other examples of
NTBs include unfair treatment of U.S. agricultural exports under Chinese
tariff-rate quotas (TRQs) on imports of wheat, corn, rice, cotton, barley,
oilseed and vegetable oils; Mexican anti-dumping duties on beef, rice, swine,
and apples, an illegitimate tax on beverages containing high fructose corn
syrup, and restrictions on fruit and dry beans; Australian SPS measures on
imports of pork, poultry, and fruit; Japanese import restrictions on apples,
rice, wheat, lettuce, and citrus, and stated plans to impose a safeguard measure
on beef imports; Taiwanese import restrictions on rice; and Venezuelan
restrictions on imports of fruits, cereals, oilseed products, meats and dairy
products.

USTR, in
cooperation with other U.S. government agencies and the U.S. agricultural
community, has been working to remove these NTBs and maximize opportunities for
exports. The past July, for example, the first California grapes arrived in
Australia after a decades long ban. And in November, through negotiations with
the European Commission, we averted a situation that could have restricted more
than $400 million worth of grain exports to Europe. The United States will
continue to aggressively work to remove NTBs through bilateral negotiations, as
well as in other forums.

Intellectual
Property: Focusing on Enforcement

The United States
is concerned about high levels of IP piracy in Asia, Central and Eastern Europe,
and Latin America due to a global lack of IP protections and enforcement. The
situation is caused by inadequate legal protections, a lack of either resources
or will to enforce existing laws, and often, a poor understanding of the
importance of IP protection to development. Once a country recognizes the harm
that piracy causes to its own economy, a willingness improve laws and commitment
the resources necessary to enforce them can follow.

Advances in
technology mean that pirates have new ways to undermine IP rights. In
particular, we are concerned about the increased rate of piracy of optical
media-music, video and software CDs, CD-ROMs, and now DVDs-as well the use of
the Internet as a global distribution network for pirated products. In addition,
we are concerned with increasing rates of trademark counterfeiting that decrease
revenues for U.S. companies and pose health and safety threats to consumers who
unwittingly purchase unsafe products such as medicines, car parts, and distilled
spirits.

The United States
is committed to promoting IP protection and we are making progress on a number
of fronts, including in our FTAs. Recently completed FTAs with Singapore and
Chile-as well as the ongoing negotiations with Morocco, Central America, and
Australia-offer opportunities to update the TRIPS Agreement standard to reflect
technological changes and to insist that important trading partners make serious
efforts to enforce IP rights.

Enforcing
Trade Agreements

Active monitoring
of compliance with trade agreements together with vigorous enforcement helps
ensure that these agreements yield the benefits bargained for in ensuring market
access for Americans, advancing the rule of law internationally, and creating a
fair, open, and predictable trading environment. Past examples of enforcement
successes include rulings against Japan's unjustified testing burdens on U.S.
fruit and nut exports, against Mexico's unfair anti-dumping duties on U.S.
exports of high fructose corn syrup, and the European Communities'
discriminatory banana regime. Recently, the United States obtained favorable
dispute rulings against Canada's prohibited export subsidies on dairy products
and India's restrictions on U.S. exports of auto assemblies, and the United
States also reached an agreement with Argentina resolving many of the issues
raised in our dispute over aspects of its intellectual property regime. Ongoing
enforcement actions involve Japanese restrictions on imports of apples, the
European Communities' provisional safeguard on steel, Venezuela's import
licensing practices, Canada's Wheat Board practices and Mexico's
telecommunications regime.

Africa

The sub-Saharan
African countries profiled in this year's NTE report are Cameroon, Ethiopia,
Ghana, Kenya, Nigeria, Tanzania, and Zimbabwe. With the exception of Zimbabwe,
each is eligible for benefits under the African Growth and Opportunity Act
(AGOA) and is working to maximize their benefits under AGOA by undertaking
reforms to improve their investment climate and to address infrastructure
bottlenecks. Issues that continue to hamper U.S. exporters in certain countries
are corruption, onerous customs procedures, and ineffective enforcement of IP
rights.

The United States
is concerned that Nigeria has reversed a trend toward eliminating NTBs and
instead is imposing new import bans on products such as certain textiles, frozen
poultry, wheat flour, cassava, millet, and sorghum, in addition to existing bans
on used clothing, bagged cement, gypsum, mosquito repellent coils, and kaolin.

Brazil

Brazil has
substantially liberalized its trading regime, but continues to impose very high
information technology tariffs of 30 percent, which, combined with other taxes,
doubles the cost of personal computers. In addition, in April 2002, the
Brazilian government approved a new tax law that dramatically increased the duty
on imported advertising materials and discriminates against foreign producers.
Brazil also prohibits importation of a number of products, including various
used goods, including machinery, refurbished medical equipment, automobiles,
clothing, and other consumer products. These restrictions increase costs to
Brazilian consumers and, in the case of used machinery and other capital goods,
reduce economic growth.

For
pharmaceuticals, continuing delays in addressing the backlog of both pipeline
and regular patent applications resulted in only two non-pipeline patents being
issued in 2002, out of 18,000 regularly filed pending pharmaceutical
applications. Simultaneously, unauthorized copies of pharmaceutical products
have received sanitary registrations relying on undisclosed tests and other
confidential data, in violation of TRIPS Article 39.3.

Brazil represents
over half of the market for sound recordings in Latin America and is one of the
world's largest markets for videos. Yet enforcement of copyright law in Brazil
remains ineffective, with U.S. losses from copyright piracy reaching $777
million in 2002. Enforcement efforts in 2002 resulted in many prosecutions, but
the deterrent effect of these prosecutions is minimal because the number of
convictions for IP rights violations remains low.

Canada

Canada is the
number one U.S. trading partner, but a number of outstanding issues hamper this
mutually beneficial relationship.

The Canadian
Wheat Board (CWB), despite reorganization, continues to enjoy
government-sanctioned monopoly status and other privileges that restrict foreign
competition. The United States committed last year to using all effective tools
available to end the CWB's monopoly on the purchase, sale and distribution of
its wheat around the world. On March 4, 2003, the U.S. Department of Commerce
issued a preliminary determination in its countervailing duty investigation,
announcing a 3.94 percent duty to be applied provisionally while dumping and
countervailing duty investigations continue. On March 6, 2003, USTR announced it
would seek the formation of a WTO dispute settlement panel to examine Canada's
wheat trading practices and the CWB. The United States is aggressively pursuing
reform of state trading enterprises through the adoption of new rules in the
ongoing WTO agriculture negotiations.

Last year's NTE
report highlighted the fact that Canada had not taken the necessary steps to
bring its dairy export subsidy program into compliance with the WTO. Subsequent
WTO decisions in July 2002 and December 2002 affirmed prior findings. Canada has
indicated it will comply with the Appellate Body's findings and is in the
process of re-regulating dairy product exports on a provincial basis.The
1996 U.S.-Canada Softwood Lumber Agreement, which mitigated the effects of
lumber subsidies in several Canadian provinces, expired on March 31, 2001. Upon
expiration of the Agreement, the U.S. lumber industry filed antidumping and
countervailing duty petitions against Canadian softwood lumber. On March 22,
2002, the U.S. Department of Commerce announced its final antidumping and
countervailing duties. Amended final antidumping rates ranging from 2.18 percent
to 12.44 percent and an amended final countervailing duty rate of 18.79
percent.

Canada is
challenging the underlying Commerce Department and International Trade
Commission (ITC) investigations in the WTO and under the North American Free
Trade Agreement (NAFTA). On November 1, 2002, the WTO Dispute Settlement Body
adopted a panel report favorable to the United States on two key issues. The
report concluded that Canadian provinces' sale of timber from public lands can
constitute a subsidy under the WTO Subsidies Agreement and that U.S. laws
governing reviews of countervailing duty orders are consistent with the WTO
Subsidies Agreement.

Negotiations in
early 2003 to find a durable solution progressed significantly and narrowed
differences in several areas. The United States continues to encourage Canadian
provinces to implement market-based pricing for sales of timber from public
lands. In the absence of an agreement on basic reforms, the United States will
continue to enforce U.S. trade laws to address subsidized and dumped Canadian
lumber.

China

China's
successful transition to a market-based economy depends on faithful
implementation of the commitments it made in acceding to the WTO on December 11,
2001. Although the task is incomplete, China has taken significant steps to
reform its economy and fulfill its international commitments. The tariff
reductions and legislative and regulatory changes introduced in connection with
China's WTO accession have, without question, improved market access for U.S.
exports. The United States is hopeful that China's new leadership team, led by
President Hu Jintao, will build on the progress made during China's first full
year of WTO membership and work to dismantle barriers to U.S. exports that
remain.

Some of the
remaining barriers are due to incomplete or delayed implementation of WTO
commitments. Other barriers, however, will continue to exist notwithstanding
China's new obligations.

In 2002,
significant barriers to U.S. agricultural exports to China were encountered on
many fronts, including China's regulation of agricultural goods made with
biotechnology, the administration of China's TRQ system for bulk agricultural
commodities, and the application of SPS measures and inspection requirements.
The United States and China were able to make progress toward resolving some of
these issues, particularly with regard to biotechnology. Other problems remain
unresolved, however, the most troublesome being China's inadequate
implementation of its TRQ commitments.

The lack of
effective IP rights enforcement remains a major challenge. If significant
improvements are to be achieved on this front, China will have to devote
considerable resources and political will to this problem.

Another area of
cross-cutting concern involves China's uneven implementation of its commitment
to greater transparency in the adoption and operation of new laws and
regulations. Although China has improved opportunities for public comment on
some draft laws and regulations, and has provided appropriate WTO enquiry
points, China's overall effort has suffered from uncertainty and a lack of
uniformity. The United States is committed to seeking improvements in this
area.

Many services
sectors also face market access challenges in China, principally due to
transparency problems and the use of prudential requirements that exceed
international norms. Progress was made in 2002 toward resolving these concerns,
but much work remains to be done.

The U.S.
Government is also concerned about the WTO-consistency of a variety of other
Chinese practices, including the use of discriminatory value added tax policies
in the semiconductor and fertilizer industries, standard-setting without regard
to scientific basis, cumbersome licensing procedures, and other
measures.

European
Union

Though the
enormously important economic relationship between the United States and Europe
is generally solid, several EU policies continue to pose significant barriers to
U.S. economic interests. Among the most notable barriers are unscientific bans
on U.S. beef from livestock treated with hormones and U.S. poultry treated to
minimize bacteria risks. The EU ban on U.S. beef has continued for more than a
dozen years despite a WTO ruling that the ban is inconsistent with multilateral
trade rules. Other major barriers include various non-transparent and
restrictive EU regulations and standards.

Since 1998, when
several EU member states imposed a de facto moratorium, Europe has lacked a
functioning approval process for agricultural biotechnology products. As a
result, more than $200 million in U.S. corn exports have been lost each year.
The United States believes that the moratoriums are a violation of WTO rules as
well as EU law-and that they set a harmful example for the developing countries
that stand to gain most from new agricultural technologies. Further, in July
2001, the EC issued new regulatory proposals: 1) governing biotech foods and
animal feed made from agricultural biotech products; and 2) imposing a
traceability and labeling scheme which would create complicated and extensive
documentation requirements for agricultural biotechnology products-from the farm
to the retailer-and a labeling regime based on consumer preference rather than
science. The expansive scope of these proposals has the potential to adversely
impact a broad range of U.S. exports. Resuming biotech approvals remains a high
priority for the United States. We continue to monitor closely these biotech
issues and consider all options.

A systemic lack
of transparency in the development and application of EU regulations
increasingly confronts U.S. exporters with barriers in many sectors. Ongoing EU
consideration of new regulation of chemicals, for example, is of particular
concern to U.S. industry. These barriers often are compounded by a lack of
meaningful opportunity for non-EU stakeholders to provide input on draft EU
regulations. To address these concerns, the United States continues to promote
enhanced transparency in the EU regulatory system and greater US-EU regulatory
cooperation.

India

India continues
to maintain a broad range of trade restrictions. In particular, the multi-tiered
tariff and tax structure have kept U.S. exports to India flat for over five
years. Lack of transparency, as well as complex, broad and discretionary
governmental powers, all combine to impede trade. Serious deficiencies in IP
rights protection continue to persist.

Japan

Over-regulation,
insufficient transparency in the development of regulations, structural
rigidity, and market access barriers continue to limit opportunities for U.S.
companies trading with and operating in Japan, our third largest trading
partner. The NTE report underscores our continuing concern with these
obstacles.

Competition in
Japan's telecommunications sector, for example, remains stifled by the lack of
an independent regulator, lack of strong dominant carrier regulation, and
excessively high interconnection rates.

Japan also
continues to maintain significant barriers to its agricultural market. Japanese
restrictions on U.S. apples remain a serious concern. The United States
requested a WTO panel to adjudicate this dispute in May 2002, and a final report
is expected from the panel in the second quarter of 2003. The United States is
also concerned over Japan's stated intention to implement its beef safeguard in
a highly inappropriate manner. Japan has increasingly employed standards and
other administrative requirements to limit agricultural imports and has shown a
growing tendency to deviate from scientific principles in setting new import
policies that deny or restrict the entry of a wide range of U.S. meat, poultry,
vegetables, and fruit products. Even with products such as rice-for which Japan
made specific commitments-gaining meaningful access to Japanese consumers is
hampered by a burdensome bureaucracy and protectionist regulations.

Finally, the U.S.
share of Japan's massive public works market has consistently remained below one
percent. Practices that prevent the full involvement of U.S. firms include
failure to address rampant bid-rigging and use of discriminatory qualification
and evaluation criteria.

Korea

Korea's continued
progress in advancing economic reform and pursuing more open, market-oriented
economic policies is key to attracting foreign investment and achieving
sustained economic growth. The United States is hopeful that the Roh
Administration will build on progress achieved by the previous administration by
placing a high priority on reducing the significant remaining barriers to U.S.
exports.

Korea imposes
high duties and maintains NTBs on many agricultural and fishery products. Of key
concern to the United States are levels of domestic support, quantitative
restrictions, and TRQs that have affected U.S. exports such as rice, beef, and
oranges.

The United States
has longstanding concerns about the Korean Government's excessive influence and
involvement in many sectors, particularly telecommunications. A new telecom
standard-which Korea intends to make mandatory-raises serious concerns regarding
adherence to WTO commitments as well as willingness to proactively protect IP
rights. The United States also continues to express strong concerns about
instances of possible Korean subsidization of semiconductor production and
exports.

Despite some
positive steps in the auto sector over the past year, Korea's high taxes-both
general and auto-related-continue to severely restrict U.S. companies' access to
the Korean market. While Korean automobile exports to the United States set
records in 2002, Korea only imported 16,119 vehicles from all foreign sources,
representing just over one percent of its market.

The lack of
transparency in rule making and the inconsistency of Korea's regulatory system
continue to be the principal problems cited by U.S. investors and exporters.
These transparency-related barriers affect a wide range of sectors, most notably
pharmaceuticals, where U.S. companies appear to have been inappropriately
targeted in an effort to implement domestic health-care reforms.

Mexico

As a result of
the changes wrought by NAFTA, U.S. exports to Mexico have doubled and Mexico has
become our second largest trading partner. Despite this welcome increase in
trade, Mexico continues to restrict access to particular U.S. goods and
services.

The most
significant development over the past year has been a dramatic increase in the
number of new Mexican barriers against agricultural imports from its NAFTA
partners. These barriers include dumping orders, safeguards, the illegitimate
use of SPS measures, and unsubstantiated questions about compliance with customs
procedures. Mexico also renewed an illegitimate 20 percent consumption tax on
certain beverages sweetened with ingredients other than cane sugar, including
high fructose corn syrup.

A number of
organizations in Mexico are blaming NAFTA for the competitive pressures that
some sectors of Mexico's agricultural sector are facing, and a few are calling
for renegotiation. In reality, trade growth in agricultural products has been
remarkably balanced since NAFTA was implemented, with U.S. exports increasing by
100.4 percent from 1993 to 2002, and imports increasing by 103 percent. The
United States will continue to work with Mexico through NAFTA to complete
implementation of its commitments and provide maximum benefits for both
countries. The United States will not, however, agree to renegotiate
long-settled provisions.

Mexico continues
to maintain measures that prevent competition in its international
telecommunications services market. This market remains dominated by a single
company with a government mandate to set high wholesale prices for calls to
Mexico and block competitive alternatives. The WTO is expected to rule this year
on a U.S. challenge to these measures.

Russia

Russia has
undertaken a comprehensive economic reform program which includes the ongoing
negotiation of Russia's terms of accession to the WTO. Despite reforms underway,
Russia continues to maintain a number of policies that pose unfair barriers to
U.S. economic interests. The most significant of these remains a recurring
series of barriers to U.S. poultry exports, which, along with recently-announced
TRQs on pork and beef, threaten to seriously restrict U.S. meat exports to
Russia. Other barriers include an inadequate enforcement regime with respect to
IP, Russia's import licensing system, standards and certification procedures,
SPS measures, and services and investment restrictions.

Ukraine

Although there
has been progress in fighting the rampant CD piracy that resulted in the
imposition of sanctions last year, Ukraine still has not enacted an adequate
Optical Disc Media licensing law as required by the Joint Action Plan negotiated
between the United States and Ukraine in June 2000. We continue to urge the
Ukrainian government to make the necessary amendments to its current Optical
Disc law to address our piracy concerns.